Read this from SOLG thread and learn about exploration companies6 Mar 2020 07:17
addicknt
Junior miners - Today 06:11
It seems to me the mistake most junior mining companies make is to make bold claims that they will be taking their resources to production. And the more they promote this line, the greater is the chance of failure or the destruction of shareholder value.
We've all seen this so many times over the years, the two most recent examples being BCN and SXX.
Management teams often do a great job of proving up a resource and initially creating shareholder value, but then completely lose sight of reality. They become self-delusional, in as much as they genuinely believe their small company will be able to roll-out a huge mining project, for which they have little, or no experience. They make undeliverable claims of being able to fund the development and spend years raising chump change in endless placings which massively dilute the private investor.
It's patently obvious that the way to create real value for shareholders is to set out the stall as an explorer, fund the business accordingly and dispel any notion of production.
Each time a company says it will be going to the market to raise x billions, the market prices in failure. It simply never believes they'll achieve success...and with good reason.
I'm completely bamboozled by the fact that NM doesn't get this. Of course, I may be completely wrong in this instance and NM may pull a giant rabbit out of the hat, but experience suggests he's facing an uphill task. God forbid this ends up like another SXX, BCN, or many others one could name.
The resource here is astonishing, major mining companies need it, and the management should be playing the hand accordingly.''
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Exploration companies should explore, discover and then monetise and leave the mining to capitalised, experienced mining companies
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